Linksys's WRE54G is a logical repeater, listening to network traffic and rebroadcasting it; but security options are lacking, advice is odd: The description of this device contains slim information. As far as I can tell, it's a Wi-Fi only logical repeater, meaning that it's using networking magic to relay data. It can't be using Wireless Distribution System (WDS) because Linksys notes it works with any 802.11b or g network. It must attach as a client to an existing network and redistribute access as an access point itself. This function is similar to Linksys's WET11 and WET54G, which bridge Ethernet networks to any access point by simulating a client and masquerading MAC addresses.
The manual for this range extender mentions multiple times in the first few pages of configuration advice that the range extender is easier to use if you turn off WEP encryption--which is extremely odd advice coming from a Wi-Fi equipment maker at this point in time. The unit only supports WEP as an encryption option, meaning that more secured networks that use WPA can't take advantage of range extension.
The unit will cost $99, but I'm not sure it's necessary except for legacy home networks. For about $80 you can purchase a WRT54G, but Linksys has only enabled wireless bridging as a fixed mode: that is, a WRT54G can't bridge and be an access point at the same time. A similar unit from Buffalo, the WLA2-54G, costs about $100 and like Apple's AirPort Extreme and AirPort Express Base Stations, can serve clients while bridging to other gateways.
If were building a network from scratch that required bridging and I wanted WPA security now, I'd choose Buffalo's gateway as the fundamental element.
Update: Tim Higgins received a clarification from Linksys that this device works only with three Linksys 802.11g routers: the WRT54G, the WRT54GS (802.11g with SpeedBooster), and the WAP54G. No other gateways are supported, which would reiterate my recommendation to stick with Buffalo for bridging a network.